MILK
The bounce of Class III milk futures did not change the weakness and direction of the market. The strength of futures was not fundamental, but the decision of traders to liquidate into the weekend in case fundamentals change and the markets become stronger next week. There was little sign of a change in market fundamentals. Milk futures were higher ahead of spot cheese trading as traders decided to take profits ahead of cash. The block cheese price bounced from the lows but still closed lower. This action did not garner much interest from traders as they expect the market to remain choppy. The average soybean meal price for September has not yet been posted. This is the final price needed to calculate the income over feed for the Dairy Margin Coverage program, The income over feed price for August was $13.72 and the September price is expected to be higher when looking at the average corn, premium/supreme hay, and the All-milk price. USDA will release the September Dairy Products report on Monday.
AVERAGE CLASS III PRICES
| 3 Month: | $19.88 |
| 6 Month: | $19.74 |
| 9 Month: | $19.62 |
| 12 Month: | $19.60 |
CHEESE
For the week, blocks declined by 6.25 cents with 12 loads traded. Barrels slipped 0.25 cent with four loads traded. Dry whey remained unchanged with four loads traded. Cash activity decreased substantially from previous weeks. Buyers are purchasing on an as-needed basis as they may have sufficient supplies purchased ahead. Buyers are comfortable with supplies and remain unaggressive. Manufacturers are moving supply to the market to keep inventory from building.
BUTTER
For the week, butter declined by 2.50 cents with nine loads traded. Buyers have already purchased a substantial supply for expected demand through the end of the year. Any increase in demand will be easily met with inventory. Grade A nonfat dry milk increased by 0.25 cent this week with 34 loads traded. That much trading activity and a minor price move indicate a balanced market. Butter production in September is expected to be larger than a year ago on the Dairy Products report.
OUTSIDE MARKETS SUMMARY
December corn closed up 3.75 cents per bushel at $4.1450, January soybeans closed down 0.75 cent at $9.9375 and December soybean meal closed down $4.20 per ton at $295.30. December Chicago wheat closed down 2.50 cents at $5.6800. December live cattle closed down $0.38 at $185.93. December crude oil is up $0.23 per barrel at $69.49. The Dow Jones Industrial Average is up 289 points at 42,052 with the NASDAQ up 145 points at 18,240.
